Attac Austria – Turquoise Green: Too Much for the Rich and Corporations, Too Little for the Climate

Not all is well in the monarchy of Austria. Attac Austria examines the current programme of the Conservative-Green coalition government and finds it lacking.

Attac Austria is the Austrian chapter of the global globalization-critical movement Attac, engaged for a democratic and socially just global economic system.

Translated and edited by BRAVE NEW EUROPE

Attac Austria has analysed the economic policies of the Turquoise-Green government. The initial assessment is predominantly critical.

The programme does not include any fundamental changes to the policy of the previous goverment with regard to the interests of the wealthy. This creates large holes in the budget and threatens the financing of important public services. Moreover, many plans and declarations of intent are vaguely formulated; it will only be possible to make a precise assessment of these when they are implemented. In the climate sector – where the plans are undoubtedly the most ambitious – there are large gaps and, above all, open questions about financing.

Tax and budget policy for the richest 10 percent

The government programme provides for tax cuts, which primarily benefit corporations and higher earners. Those who have the most continue to contribute too little – partly because wealth and inheritances are not taxed at all and the tax on capital income is once again being reduced.

A huge tax gift for corporations and wealthy people

As already planned by the previous government, the tax on corporate profits (corporation tax, KöSt) is to be reduced to 21 percent. This would mean that the top 5 percent most profitable corporations alone would contribute about 1.25 billion euros less to the common good. However, this will by no means lead to more investment or less unemployment, but to more profits for shareholders and more inequality.

In addition, a reduction of the tax on corporations further fuels the ruinous race to the bottom in European tax-rates. The commitment to close tax loopholes and introducing a financial transaction tax remains only an empty promise, while there are no concrete effective measures such as tax transparency for corporations or an unitary taxation for transnational corporations.

Eco bonus for the rich

Another tax gift for the wealthy: Capital gains tax is to be abolished for “ecological investments” and for profits from share sales after a minimum holding period (of probably one year). The costs of a maximum of 300 million euros will mainly end up in the pockets of the richest 10 percent, because only they generate significant income from securities and shares.

Wage tax reform: Nil for small incomes, largesse for large ones

In principle, it would make sense to reduce taxes on low incomes, financed by higher taxes on wealth and capital income. What the government is planning, however, is a radical tax reduction programme. The planned income tax reform will mainly benefit higher earners. This will cost four billion euros in total. The lowest incomes, on the other hand, are going empty handed because no negative tax is planned.

A hole in the budget compensated by fiscal reductions?

The total loss of revenue from these tax gifts amounts to more than 6 billion euros. There are no plans for counter-financing through property or inheritance taxes. Including the investments that have already been planned, the budget is thus lacking at least around 3 billion euros – and considerably more if the economic situation worsens. The government’s tax gifts endanger not only the planned investments in climate protection, but also the welfare state and the cohesion of society. Since the goal of a balanced budget is also being maintained in principle, there is a threat of environmental, climate, or social cutbacks in the near future.

Climate protection: Large gaps and open questions about financing

Turquoise-Green wants to make Austria climate-neutral by 2040 and presents a series of measures that go in the right direction. In order to actually reduce emissions necessary to tackle the climate crisis in a spirit of solidarity, policymakers must radically restructure the energy, agriculture, and transport sectors. This means not only promoting alternatives, but also curbing harmful practices. However, the government is shunning the necessary confrontation with corporations and dirty industries.

Strong expansion of renewable energies with unclear financing

The most concrete plans are in the energy sector: By 2030, Austria is to be supplied with 100 percent electricity from renewable energy sources. The necessary expansion of wind power and photovoltaics is to be financed with a maximum of one billion euros per year. This is twice as much as before, but by far not enough for the targeted tripling of wind power and tenfold increase in photovoltaics.

Moreover, if no measures are taken to radically reduce overall energy consumption, there is a danger that Austria will soon consume more renewable AND fossil energy. The existing Energy Efficiency Act, which has not yet brought about any reduction in emissions, remains unchanged. Positive aspects are the planned phase-out of oil and coal for heating systems and the partially planned phase-out of fossil gas. A good step towards a decentralised and democratic energy supply is the planned promotion of energy communities.

Socio-Ecological tax reform remains open

In addition to the already very concrete reduction of corporate, capital gains and income taxes, the government programme provides for an ” Socio-Ecological tax reform” (at its heart, the pricing of CO2) but details are still completely open and will not be worked out until 2022.

Public sector incentives and megaprojects

In the case of transport, which accounts for around a third of total emissions, the programme focuses on strengthening railways and public transport. Additional investments and an affordable annual ticket for all austrian public transport are important steps in the right direction. At the same time, there is a lack of measures to reduce air and car traffic, such as a stop on new petrol and diesel car registrations (as will apply in Norway from 2025, for example) and motorway projects. No rejection will be given to climate-damaging megaprojects such as the third runway at Vienna International Airport, the “Lobautunnel” near Viennna and the Waldviertel motorway. This will create expensive infrastructure that will cement climate-damaging mobility for decades to come.

Banks and financial markets: The banking lobby dictates policy

The government’s banking and financial sector policy clearly shows the signature of the banking lobbies and threatens financial stability. This is evident in the attempt to weaken capital reserve rules or regulations or – particularly worrying – to torpedo plans for a European deposit guarantee scheme.

Trade and investment policy: no change of course

Besides a faint “no” to EU-Mercosur and some criteria for future trade agreements – otherwise there is little new on trade policy in the government programme. Trade is to be further increased, “protectionist tendencies” are to be repealed. Overall, the current course of trade policy will be maintained in the interests of the export industry – with all the negative consequences for the Austrian people and the environment.

Labour and social security: few improvements, no vision

In the area of labour, the deterioration of the previous government are maintained – including the 12-hour day/60-hour week and the control by companies over social security. New working time models or even the urgently needed reduction of working hours are lacking. There are hardly any concrete improvements in labour law, although low wages are to be raised with the involvement of the social partners (Unions and employers.)

Gender justice: setbacks and vague promises

Men are the main beneficiaries of the tax gifts for companies and higher earners – the same applies to the increase in the family bonus. Children of wealthy people receive five times as much as children of low-income workers. Children whose parents cannot work go away empty-handed. The tax cuts mean that there is no money for public services that would be important for greater equality and gender justice.

Agriculture – improvements without changing the system

In the agricultural sector, the programme essentially maintains the status quo and ignores the enormous need for change. There is no question of altering essential control mechanisms. These include, for example, the distribution of subsidies according to the watering can principle, whereby large farms in valley areas benefit most. Growth and change of direction in agriculture with all its negative effects on humans, animals, and the environment is thus perpetuated.

State, basic rights and migration

One of the major projects announced in the Turquoise-Green government programme is the Transparency Initiative. At the same time, there are numerous authoritarian elements which suggest that the course of recent years will be continued. In addition to more money for the military and police, it contains a commitment to the deployment of the army at home and to PESCO, the EU military alliance that commits Austria to arming and participating in combat operations. Mass surveillance is to be expanded.

Instead of focusing on the disastrous effects of the economic system on people and the climate, Chancellor Kurz’s government slogan is “Protecting the climate and borders”. He thus equates the climate catastrophe with the alleged threat of flight and migration. It plays down the extent of the climate crisis and at the same time legitimises the further restriction of the rights of refugees and Muslims. Racism and exclusion are thus further normalized. The deadly border regime remains untouched – and with it the connection between the causes of flight, the climate crisis and the current economic system.

“Business as usual” is not enough for us

A policy in the interest of the majority of people requires a fundamental change in the way we live, produce and consume, how we distribute our wealth and a comprehensive democratisation of all areas of life – including the economy. We are committed to this and are trying to build up broad political pressure. Because “business as usual” is too little for us and irresponsible in view of the social and ecological crises.

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